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Tesla's Q1 Delivery Shortfall Raises Concerns of Demand Gap

By Don Francis, Editor
April 3, 2024 7:44 AM UTC
Tesla's Q1 Delivery Shortfall Raises Concerns of Demand Gap

Deutsche Bank's Emmanuel Rosner maintained their Strong Buy rating on Tesla (NASDAQ: TSLA). The analyst also maintained a $200 price target.

Tesla's first-quarter delivery and production figures fell short of Deutsche Bank's lower-than-Street estimate of 414,000 deliveries, raising concerns about a potential demand shortfall. Rosner cautioned that the discrepancy between deliveries and production, which amounted to 46,000 units, suggests a significant buildup in inventory. This, coupled with known production bottleneck issues, indicates a potential "serious demand shortfall," according to the analyst.

While the soft production figure was somewhat anticipated, the extent of the shortfall in deliveries came as a surprise. The primary driver of this shortfall was attributed to demand issues in the U.S., which could pose downside risks to gross margin expectations, as detailed by Rosner. Looking ahead, the recent price increases implemented by Tesla in the U.S. and China may need to be reversed, potentially putting further downward pressure on selling prices for the remainder of the year.

In addition to Rosner's analysis, Baird's Ben Kallo issued an update on Tesla on April 2, 2024. Kallo lowered their price target by 6.7%, from $300 to $280, while maintaining a Buy rating on the stock.

Currently, 60% of top-rated analysts rate Tesla as a Strong Buy or Buy, with 40% considering it a Hold. No analysts recommend or strongly recommend selling the stock.

The consensus among analysts is that Tesla is expected to deliver earnings per share (EPS) of $5.43 for the upcoming year. If these forecasts hold true, Tesla's next yearly EPS would represent a 14.8% increase on a year-over-year basis.

In terms of stock performance, Tesla has experienced a significant decline since its last quarterly report on December 31, 2023. The stock price is down 32.9% during this period and down 14.4% year-over-year. Comparatively, Tesla has underperformed the S&P 500, which has declined by 26.2%.

Deutsche Bank analyst Emmanuel Rosner ranks in the top 19% of Wall Street analysts, with an average return of 8.5% and a win rate of 39.1%. Rosner specializes in the Industrials and Consumer Cyclical sectors.

Tesla, Inc. is a leading manufacturer and seller of electric vehicles and energy generation and storage systems worldwide. The company operates in two segments: Automotive and Energy Generation and Storage. The Automotive segment offers electric vehicles, automotive regulatory credits, and after-sales services. Tesla's Energy Generation and Storage segment focuses on solar energy generation, energy storage products, and related services for residential, commercial, and industrial customers. Headquartered in Austin, Texas, Tesla was formerly known as Tesla Motors, Inc. before rebranding in February 2017.

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